A surge in the unemployment rate almost ended the Australian sharemarket’s losing streak after it sparked another scramble for high yielding stocks and a sharp drop in the Australian dollar.
The S&P/ASX 200 index again rebounded from a 0.4 per cent drop to close three points, or 0.05 per cent, down at 5509 after the unemployment rate jumped from 6 to 6.4 per cent, sending bond yields lower.
The Australian dollar tumbled US0.9¢ to US92.60¢ and government 10-yer bond yields fell 8.7 points to 3.425 per cent after the economy shed 300 jobs last month.
Although the net loss of jobs was a negative, the data was possibly distorted by the quarterly sample change, prompting economists to remind that the overall trend was a better indicator than volatile monthly numbers.
“The forward looking indicators continue to point to a sound, if rather lacklustre, labour market,” Westpac economist Justin Smirk said.
“As such, within the month to month volatility of the survey an average employment gain of around 10k to 15k per month is still the most likely outcome over the next few months.”
The Shanghai composite index was down 0.7 per cent at the close of the ASX while Japan’s Nikkei index rallied from the red to a 0.3 per cent gain.
Last night European stocks but finished off the day’s lows and the US S&P 500 index closed flat after German factory orders plunged 3.2 per cent and Italy dropped back into recession with a 0.2 per cent decline in its June-quarter GDP.
Peripheral eurozone bond yields also missed the reach for safe-haven assets which continued to rise on in line with US high yield corporate bonds as caution crept through credit markets.
Sentiment was undermined in the US where 21st Century Fox withdrew its bid for Time Warner, sending the media stock tumbling 12.8 per cent, while Sprint also walked away from talks to buy T-Mobile US.
Spot iron ore rose 0.4 per cent to $US95.90 a tonne while Dalian iron ore futures were up 0.2 per cent.
Copper fell another 0.8 per cent to $US7005 a tonne and gold jumped $US17 to $US1306 an ounce.
OptionsXpress market analyst Ben Le Brun said investors were buying in as they speculated whether there was scope for another Reserve Bank interest rate cut.
"At the end of the day, it was probably a positive for the Australian share market,” Mr Le Brun said.
"But some of these data prints can be a double-edged sword."
Financial stocks were the largest losers on Thursday as all big four banks ended the day in the red.
Commonwealth Bank lost 36 cents to $81.35, NAB fell 18 cents to $34.45, ANZ slipped 13 cents to $32.85 and Westpac dropped two cents to $33.65, according to preliminary figures.
Financial services company FlexiGroup was one of the bright spots in the sector, gaining eight cents to $3.85 despite reporting a drop in profit for fiscal 2014.
Rio Tinto lifted 50 cents to $66.32 after reporting a $4.4 billion first-half net profit while BHP gained 15 cents to $38.47 and Fortescue put on three cents to $4.72.
After the market closed, Rio announced it had more than doubled its half year net profit to $US4.4 billion ($A4.76 billion).
Natural gas company Envestra ended the day up 3.5 cents at $1.315 after its biggest shareholder backed a $2.4 billion takeover bid by a Hong Kong consortium.
It was also one of the most traded shares on the market, with just shy of 17 million equities changing hands.
Tabcorp closed 11 cents higher at $3.56 after it lifted its full year profit by three per cent.
The broader All Ordinaries index was down 3.3 points, or 0.06 per cent, at 5500.7 points.
At 2.15pm, the September share price index futures contract was down 12 points at 5446, with 24,873 contracts traded.
National turnover was 2.1 billion shares worth $4.7 billion.